SIU still gunning for Telkom

November 27, 2023 Siyabonga Mtangana

The Special Investigating Unit (SIU) and Telkom were in court again on Monday. The SIU is seeking leave to appeal a judgment that stopped a probe ordered by President Cyril Ramaphosa into alleged historical malfeasance at Telkom.

Telkom is opposing the SIU’s application for leave to appeal a high court judgement halting an investigation into its affairs. In July, the high court set aside a proclamation by President Cyril Ramaphosa to launch an investigation into Telkom, saying that the SIU could not probe the company as it is not a state-owned enterprise.

“Telkom remains committed to good governance and anti-corruption efforts and respects the application for leave to appeal by the president and SIU,” a Telkom spokesman told TechCentral on Monday is response to questions.

The result of the application for leave to appeal may not be known until 2024, but Telkom’s spokesman said the operator hopes a judgment is given this year still.

President Cyril Ramaphosa ordered the probe into Telkom’s affairs in January 2022. But the high court said that the SIU’s probe into maladministration, malpractice and possible corruption at the JSE-listed telecoms group – going back 17 years – was both unconstitutional and invalid, adding that the investigation had neither force nor effect.

Included in the SIU’s scope was the partially state-owned operator’s aborted R10-billion attempt at entering the Nigerian market, which involved the sale and disposal of a company called Multi-Links Africa and others called iWayAfrica and Africa Online Mauritius.

Also under the SIU’s purview were the procurement of both telegraph and advisory services whose procedures were thought to be “not fair, equitable, transparent or cost-effective”.

A ‘mess’

Former Telkom CEO Nombulelo Moholi admitted in June 2012 that the telecoms group had made a hash of its investments elsewhere in Africa. “A lot of the investments we made we shouldn’t have made,” she said then.

Multi-Links reported an operating loss of R522-million for the financial year ended 31 March 2009 and R1-billion for the year ended 31 March 2010. Telkom wrote down goodwill and assets of R5.8-billion.

Then, on telegraph services, Phuthuma Networks – a company led by businessman Ed Scott – took Telkom and various regulatory bodies to court over a disputed tender, published in November 2007, for the outsourcing of Telkom’s telex services. This tender was cancelled in June 2009, Telkom claimed at the time, after it discovered the tendering process was a “mess”.

Read: Court sends Ramaphosa packing over Telkom probe

But Scott claimed that another company that bid for the tender, Network Telex, had begun providing telex services for Telkom without the tender having been awarded. Scott claimed this was in breach of the law, as the service had to be provided by Telkom or outsourced to a third-party provider through a formal tender process.

Regarding the advisory services, the SIU focused on a contract between Telkom and consulting firm Bain and Company for its mobile broadband strategy, developed in 2013. Bloomberg News reported in July 2014 (paywall), citing a document in its possession, that Telkom awarded the R91.1-million advisory contract to Bain without following an open bidding process. Bain was contracted on the watch of former Telkom CEO Sipho Maseko, who stepped down at the end of last year.